1.
(TCO
1) George Corporation has an estimated monthly sales of 12,000 units
for $80 per unit. Variable costs include manufacturing costs of $50 and
distribution costs of $20. Fixed costs are $60,000 per month.
 
Required:
Determine each of the following values.
a. Unit contribution margin
b. Monthly break-even unit sales volume 
 
Create a contribution margin-based income statement.
(Points : 30) 2.
(TCO
7) Darling Manufacturing Inc. manufactures two products, A and B, from a
joint process. A single production costs $5,000 and results in 200
units of A and 800 units of B. To be ready for sale, both products must
be processed further, incurring seperable costs of $3 per unit for A and
$4 per unit for B. The market price for Product A is $15 and for
Product B is $10.
 
Required: Allocate joint production costs to each product using the net realizable value method.
(Points : 30) 
3.(TCO 6) Santa Inc. manufactures toys based on the following information.
Standard costs

 

 

 

 

 

Materials (4 ounces at $4)

 

 

 $16 

 

 

Direct labor (1 hour per unit)

 

 

 $7 

 

 

Variable overhead (based on direct labor hours)

 

 

 $3.50 

 

Fixed overhead budget

$16,000 

 

 

 

 

 

 

 

 

 

 

Actual results and costs

 

 

 

 

 

Materials purchased

 

 

 

 

 

 

Units

10,000 

 

 

 

 

 

Cost

$38,500 

 

 

 

 

Materials used in production

 

 

 

 

 

 

Finished product units

2,200 

 

 

 

 

 

Raw material (ounces)

9,500 

 

 

 

 

 

Direct labor hours

2,200 

 

 

 

 

 

Direct labor cost

$18,000 

 

 

 

 

 

Variable overhead costs

$8,400 

 

 

 

 

 

Fixed overhead costs

$16,200 

 

 

 

 

 

 

 

 

 

Required:

 

 

 

 

Compute the following variances (show calculations).

 

 

 

 

a. Materials usage variance

 

 

 

 

b. Labor rate variance

 

 

 

 

-c. Fixed overhead budget variance

 

 

 

(Points : 30)




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